The IPO Crisis: Title I of the JOBS Act and Why It Does Not Go Far Enough

Article by: Brian Howaniec

42 PEPP. L. REV. 845 (2015)

Financial legislation is a constant balancing act between economic growth and investor protection. That balancing act took center stage when President Obama—as well as legislators from both parties—celebrated the relaxation of corporate financial regulations on April 5, 2012. These new regulatory reductions are known as the Jumpstart Our Business Startups Act (cleverly nicknamed the JOBS Act). President Obama heralded the JOBS Act as helping both businesses and the American people. Many politicians and commentators were particularly excited about Title I of the JOBS Act, which is designed to help young, fast-growing companies go public cheaper, faster, and easier. However, some investor advocates have questioned the changes and fear that the JOBS Act may have put investor protection measures at risk.

This Comment explores the brewing controversy over Title I and assesses the actual impact that it is having (and will have) on investor protection and the IPO market and argues that Title I has the ability to affect both, but, due to factors outside of Congress’s control, will likely have only a minimal effect on either.